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Web3 Glossary - the Y of web3 :p
You've heard about dilemma, let's talk about the blockchain trilemma featuring modular blockchains
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Well, a little happy dance right there. Let’s get to the classic blockchain trilemma since we got no terms from Y in the web3 glossary 😅😅
If you thought this was the trilemma, let me break it to you. It isn’t!
Decentralized networks can only provide 2 out of 3 benefits at any given time in terms of decentralization, security, & scalability- That’s the Blockchain Trilemma
Vitalik Buterin, the founder of Ethereum, coined the expression. According to Vitalik’s diagnosis, a blockchain can’t be scalable and secure while maintaining decentralisation. You can read the original piece here.
This technological bottleneck has proven especially difficult to overcome so far.
But why the trilemma?
Security ✅, Decentralisation✅, Scalability❌
👉Inability to scale means that the network is too costly or too slow to run global services efficiently at scale.
Decentralisation✅, Scalability✅, Security❌
👉Security is undeniably the most crucial aspect of the trilemma: nobody wants to use a faulty, buggy or insecure service.
Scalability✅, Security✅, Decentralisation❌
👉Lack of decentralisation => that big players or central authorities can censor the network and manipulate its governance.
Time to look at solutions that aim to solve one apect of the trilemma - Modular blockchains which aim at solving for scalability & flexibility
We’ll be comparing different modular blockchains today, but first
What’s a modular blockchain?🧐
In monolithic blockchains such as bitcoin, Ethereum all the nodes & validators of the network are required to execute the same transactions & do consensus on the chain
Modular blockchain focuses on handling a select few duties (consensus, execution, Data availability & settlement) & outsourcing the rest, to one or more separate layers
It’s just like separating a system into distinct components that can be combined in various ways to achieve specific objectives
Think of it as Lego bricks that can be combined to form different structures 🤯
Now that we understand the concept, let’s look at different modular blockhains:
Ethereum’s adoption of sharding and rollup-centric computation does make it a modular chain. 👇👇
📌It separates consensus and data availability, which splits up the blockchain into multiple sub-chains, each handling a different portion of network activity.
Ethereum is adopting a sharded design in which 64 shard chains will operate in parallel 👇👇
📌It outsources execution while focusing on settlement, consensus, and data availability.
Ethereum acts as the base layer (L1) for rollups sitting on Layer 2
In this network, nodes are only responsible for storing and ordering transactions, they don't interpret transaction data for execution. These chains serve as data availability layers for other execution layers (e.g., rollups)
📌Any execution environment can use Avail for data ordering and availability be it off-chain solutions or standalone solutions
CelestiaOrg is another modular blockchain that specializes in consensus and data availability, off-loading execution to separate chains, such as rollups.
Decoupling execution from other functions, alleviates the largest bottlenecks associated with a monolithic chain from the base layer: transaction execution & state bloat👀💯
Coming to the next one,
They use off-chain data availability & computation to improve throughput by processing txns off the parent chain. Like ZK-rollups, validiums publish zero-knowledge proofs to verify off-chain txns on parent chain
This prevents invalid state transitions & enhances the security guarantees of a validium chain
These validity proofs can come in the form of
ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) or
ZK-STARKs (Zero-Knowledge Scalable Transparent Argument of Knowledge)
More on this in tomorrow’s letter👀👀
Rollups are also an example of modular blockchain. More on rollups here
That’s a wrap for today!
Stay tuned for more on the new vocabulary of the new web.💯
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